Okay BP here is my first question:
I am in the US Army and live in Oregon, I am from a small town in Georgia where my Mother and other family members are living. I am really wanting to buy the house that my Mother has been renting for over 20 years, my grandparents home (which is only around $8,000) and one other property in the community. I would like to use this property as rental property and hopefully make an income off of it. Now, 1. I would like to see if there is a way to achieve this, without using my credit or income (if its possible I need to know how). 2. I am not going to living in the town but I will have someone there who is capable of managing the properties. My Mothers home and the second property could be purchased for around $40,000 a piece. How do I get this done?
Considering I am new I do not know much either, but over the last few weeks I have learned a lot. In this situation maybe it is plausible to find a partner to help. For instance the partner can purchase the property under his name, and then you guys can talk to a lawyer and write up a statement stating how you will split.
Not really sure of any other way how to purchase a property and not using your credit or income, but I am sure someone will assist. Well anyways good luck, and welcome to BP! Continue to do your research especially here as you will find a lot of great information.
Jerry, not sure I can answer all your points, but I can help you with the home your Mother has been renting. Have you considered a Rent to Own situation? As a first step, run the numbers to make sure that the margins are there to make the deal. If they are, consider this: Income can be derived three different ways: First, from the Non-refundable consideration a Tenant Buyer could provide you (In my market about 8-10% of the current ARV of the home). Secondly, from the rent you derive during the term of the Lease Option (let's say the mortgage is $1200 and you rent it for $1500... the delta or profit each month is $300). Lastly, you can also Option this property for 8-10% more that what it's worth (ARV) now, 12-18-24 months from now. One property - 3 different streams of profit. After you've worked these numbers, look here on BP for people in your immediate area willing to JV with you. As a means of leverage, they may be able to provide the funding you need for a piece of the Pie. Talk to the owner, make him a creditable offer and see what he says (you're making money on the consideration, rent and end ARV of +8-10%)
This evening, I'm going to do the exact same thing with a property I'm buying. The property is being purchased at 150K and the ARV is 235K. The owner has some tax problems which we're going to take care of for him (his motivation for the great deal), but based on the spread, I've JV'd with a partner who is willing to put up the money for the purchase, the back taxes and the repairs (about $4K). Both of us will market the property to end buyer (Tenants) and both of us will make some money. Btw, the total potential profit for this particular property will be ~$15,000 non refundable consideration; about $4,500 in rent ($250/mo. X 18 mos.) and $89K (~252K ARV 18 mos. from now -150K purchase Price -13K in back taxes) for a total of $108K. Keep in mind this is an 18 month process and there are a number of people splitting this pie, but it's still a tidy little profit for all, AND we get to help a few people out along the way.
Jerry, If your mother has lived there for over 20 years, then I would assume there is a good relationship with the owner. I believe a contract for deed with no money down would be quite appropriate. The owner would still be getting monthly income but they would no longer be liable for any land lording duties. What communication have you had between you and the owner concerning purchasing the house?
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